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Federal Government announces plans to change JobSeeker rate as payments return to pre-pandemic levels

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Federal Government announces plans to change JobSeeker rate as payments return to pre-pandemic levels


Treasurer Josh Frydenberg has revealed that the Federal Government is planning to make changes to the JobSeeker rate when the coronavirus supplement ends in March.

The removal of the supplement, which currently gives eligible recipients an additional $150 per fortnight, has job-seeking Australians worried that they will once again have to survive on $40 a day.

In an interview with Sunrise on Monday, Mr Frydenberg said he would not “speculate on speculation” when asked whether the Government would streamline or increase the JobSeeker payments.

“We effectively doubled the safety net during the course of the pandemic [and] that really helped those on lower incomes. That ends in March, and at that point we will make a decision and an announcement about that future rate,” he told Sunrise.

“In terms of the rate and its future, we will consider that in the normal expenditure review committee process, and that’s what we’re doing right now.”

The announcement comes after Scott Morrison’s statement last week that the Government was “still considering” changes to unemployment benefits.

“When we’re in a position to make a statement on those, then we will,” Mr Morrison said.

The Australian reports that up to 20 lower-value legacy supplements could be scrapped and replaced with a more streamlined JobSeeker scheme.

The measure could see pharmaceutical, telephone, literacy, and utility allowances rolled into a single payment in a bid to boost the program.

Loss of JobKeeper subsidy sparks unemployment fears

The Treasurer’s announcement has sparked fears of a poverty and unemployment crisis in Australia with the Government’s JobKeeper wage subsidy also due to finish up in March.

New data from the Australian Taxation Office has revealed that the number of people on the JobKeeper wage subsidy has more than halved from September to December last year due to climbing eligibility requirements.

The figures show that more than 2 million employees and over 500,000 employers have ‘graduated’ from the scheme, which is lower than the federal budget forecasts.

Despite mounting pressure to keep the payments going, Mr Frydenberg said that it “has always been a temporary program” and that extending it further could hinder Australia’s economic recovery.

“We extended it for another six months at an estimated cost of $90 billion dollars. It is the most expensive single economic support program Australia has ever undertaken. It supported around 6.3 million Australians at its peak,” he said.

“If you leave it in when the economy strengthens, as is occurring right now, it has a number of adverse incentives and it prevents the allocation of workers to more and better roles across the economy.”

More than half a million entities were still accessing the JobKeeper wage subsidy in December, with 86 per cent of workers on the tier 1 payments of $1,200 per fortnight and 14 per cent on the tier 2 payments of $750 per fortnight. This has since dropped to $1,000 per fortnight and $650 per fortnight, respectively.

In March 2020, the Federal Government introduced the JobKeeper Payment Scheme as part of their $320 billion economic support package to subsidise wages for businesses impacted by COVID-19.

The scheme, which supported 3.6 million Australians at its peak in September last year, was designed to help employers pay their employees for up to six months and allowed legible businesses to claim a reimbursement through the ATO.

JobKeeper remains open to new and existing participants who are eligible until March 28.


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Dahlia Jovic

Dahlia Jovic

Dahlia is a Junior Editor and Journalist at Dynamic Business. She is an Honours student in Media and Communications at the University of Sydney with a specialisation in Digital Cultures. Her areas of interest include business, technology, entertainment and videography.

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